When the Supreme Court ruled gun bans in DC and Chicago unconstitutional, some gun activists advocated government simply buying up all the ammo. Guns would be worthless, they reasoned, if no bullets were available. That would be like giving phones to teenagers, but withholding all the batteries.
That same concept is behind Colorado’s current debate about government taking away the value of property without compensation. You may keep your private property, but government rules often limit your use of it. If compensation is not paid, that is called a “regulatory taking.” It is common everywhere, but Amendment 74 would stop it in Colorado.
The 5th Amendment prohibits government taking private property for public purposes without just compensation. But what about taking away property’s value, not the deed itself.
Three examples show how unfair the process can be.
The Murr family owned a house on a one-acre lot. The neighboring lot was vacant, and zoning rules allowed anybody to build a similar house on it. So the Murrs bought it to build a house for their daughter so she could live closer. But the local zoning rules said anyone else could buy the lot and build on it – but not the Murrs. So when they died their children decided to sell off the extra lot, only to find out the zoning board had changed the rules and combined the properties – years after the original purchase – so they had only one lot. The zoning process had taken away the $410,000 appraised value of the extra lot.
Jim Wickstra bought a 3-acre parcel on Lake Michigan, intending to build a valuable beach home for resale. A few months later, the Legislature approved the Michigan Sand Dune Protection Act, designed to stop development along the lakefront. Mr. Wickstra applied for the required permit, but was denied, even though he offered several alternate plans to protect the dune and to build an environmentally sensitive home. The State tax agency ruled that the property was worth $200,000 with a building permit and only $500 without it. Yet he spent more than a decade fighting to get compensation for the loss of $195,500 in property value – to no avail.
A group of Florida homes were quite valuable because they had private beaches. But a new law allowed the State to declare public beaches on formerly private property, under the guise of beach restoration after a storm. The State simply proclaimed it public, without any thought of paying the owners for the confiscated value.
In all three cases, courts sided with the local and state governments, saying the owners still had retained some property value, albeit it substantially reduced. Exactly how much less must the
property value be, before government must pay for the value taken? Unfortunately, that is a judgment call, and courts are all over the map in recent years.
When Coy Koontz sought to develop 3.7-acres of his wetlands property, he offered to compensate for the lost wetlands by deeding a conservation easement on 11 acres to the conservation district, as the local law required. But the district instead wanted him either to reduce his development to one acre and put an easement on ALL the rest of his property, or pay thousands to improve district land miles away. In that case, the Supreme Court ruled that the government’s action required compensation for the value of property taken.
Similarly, David Lucas bought two development lots on a barrier island near Charleston, but the South Carolina Coastal Commission later change the zoning laws and prohibited the two houses he had planned to build. In both cases, and several others, the court has re-affirmed the 5th Amendment prohibition against such “regulatory takings” without just compensation. So why can’t the courts agree on when such a “taking” requires compensation and when it does not?
It seems logical to most observers that taking an owner’s right to use their land often amounts to almost the same thing as taking its deed. But court rulings have made the issue much more complicated than mere common sense. That’s why voters are being asked to settle it once and for all, at least in Colorado. If Amendment 74 passes, it may lead to similar initiatives in other States. I would be proud for Colorado to become the first State to make clear that the 5th Amendment means exactly what it says.
City and county officials are understandably concerned, arguing that virtually all rules have at least some effect on property values. That is exactly the point: officials should be more hesitant to adopt rules dictating how people can and cannot use their property. The courts say there is no “taking” of private property requiring “just compensation” unless the government either takes the actual deed, or wipes out virtually ALL of the value. But if such regulatory takings do not violate the letter of the Constitution, they certainly violate its spirit.
Unless you think America’s founders wanted to keep people from building homes or running businesses on their own property, then they must have had something else in mind. Indeed, they drafted the “takings clause” of the Fifth Amendment without any inkling that someday governments would use zoning and other land use regulations to take away the value of people’s property, and leave them holding worthless deeds.
Sometimes governments do need to take private property for public purposes, such as roads, bridges, and public buildings. That is why the founders explicitly provided the power of “eminent domain,” allowing governments to “take” such properties into public ownership – providing just compensation (meaning fair market value). Without that system, America’s infrastructure would not exist as we know it.
Similarly, governments today may make land use decisions that benefit the general public, including reasonable zoning. Such rules can limit the size of buildings, or reserve particular areas for industrial, farming, or residential uses. That is within government’s power, but when it reduces the value of private property to benefit the whole society, then society has a duty to pay for that value.
This issue shouldn’t be complicated. What happened to Jim Wickstra, the Murr family, and the Florida beach owners was clearly not fair. Amendment 74 may or may not be the last word on the issue, even in Colorado. But it might touch off a much bigger debate on the proper role of government. It has been far too long since Americans have given much thought to that question.
An edited version of this column appeared in the Grand Junction Daily Sentinel October26, 2018.
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